1. The price quotations of treasury bonds with maturity of 08/31/2018 in the WSj showa bid price of 100,5547 and add price of100,5703 At what price can you buy the treasury bond with a face of$1000 from a bond dealer?
A) $1,000
B) 1,005.547
C) 1,005.703
D) 100.5547
E) 100.5703
2. A tax-exempt bond provides a yield of 49% what are the equivalent taxable yields on the bond for investor with 25% and 39.69% tax rate respectively?
A) 2.62% and 2.114%
B) 3% and 2.416%
c) 4% and 4%
D) 4.667% and 5.795%
E) 5.333% and 6.623%
3. The yield ration is a key determinant of the attractiveness of municipal bond. The ______ the yield ratio, the ______ the cutoff tax bracket. And more individuals will prefer to hold municipal bonds.
A) higher, lower
B) higher, higher
C) lower, higher
D) lower, lower